WASHINGTON - The deficit for the just completed 2014 budget year was $483 billion, the lowest of President Barack Obama's six years in office, the government reported Wednesday.

It's the lowest since 2008 and, when measured against the size of the economy, is below the average deficits of the past 40 years. The deficit equaled 2.8 per cent of gross domestic product, which is the economy's total output of goods and services.

By comparison, the deficit for 2013 was $680 billion, or 4.1 per cent of GDP.

Here's an easier way to understand why the new numbers are good news: The government borrows 14 cents for every dollar it spends; six years ago, it was 40 cents.

The retirement of those in the baby boom generation is projected to spike the deficit in coming years. The Congressional Budget Office warns that the current trajectory is unsustainable and eventually could lead to a fiscal crisis.

For now, slow growth in government spending, including on health care, and increased tax revenues have combined to produce rosier deficit numbers.

Treasury Secretary Jacob Lew said it's an indication the economy is far healthier than when Obama became president in January 2009. Lew hailed "the most rapid reduction in the budget deficit since World War II."

Obama inherited an economy in recession. The deficit topped $1 trillion for each of his first four years in office, including a record $1.4 trillion in 2009.

"Our economy is better off now than when the president took office by almost every measure," Lew said.

Much of the slower growth in spending is due to lower-than-expected health care costs as well as a 2011 budget pact with Republicans that sharply curbed agencies' operating budgets.

Obama also engineered a tax increase on upper bracket earners at the beginning of last year.

The improved deficit picture has sapped much of Washington's urgency to curb red ink even more.

Since the tax increase at the beginning of 2013, the GOP-controlled House and Obama have steered clear of further large-scale efforts to reduce the deficit. Instead, a budget deal last December reversed agency budget cuts known as sequestration.

"What I don't think we have is an emergency right now," Lew said.

If Republicans reclaim the Senate after November's elections, they are sure to try to rein in the deficit even further. But an agreement with Obama may continue to prove elusive because he says any large-scale budget deal needs to include higher taxes.